Coffee, tea or Eveready?

14 July 2006

Next time you say 'Give me Red', it may be tea, a mosquito coil or even an apartment you are asking for. Venkatachari Jagannathan reports on the battery of products Eveready is putting out.

Eveready Industries India Ltd, the Rs 827 crore dry battery maker and part of the Kolkata-based Williamson Magor Group, is on the move — in terms of its technology, capacity, infrastructure, retail reach and, hold your breath, its prime real estate holdings.

Last year, Eveready Industries acquired BPL Soft Energy Systems Ltd for Rs 67 crore — Rs 45 crore cash and Rs 22 crore in liabilities (one crore is 10 million) — and renamed it  Powercell Batteries. Powercell's plant in Karnataka has a capacity of 20 crore units per year and makes two brands BPL Powercell and BPL Shakthi, which enjoy a combined market share of 8 per cent in the Rs 1,500 crore (220 crore pieces) domestic dry cell battery market.

Lean and clean
Post acquisition, Eveready — which has an equity of Rs 35.87 crore — centralised sourcing and is flexing its newly beefed up muscle to get inputs at more competitive rates. This is important, as the price of zinc — the main input — has jumped from the $1,000 to $1,200 per tonne band to a $3,000 to $3,500 per tonne range in the last 15 months. Eveready uses around 1,000 tonnes of zinc per month.

Integration of backend facilities like warehousing, logistics and others, has also enabled Eveready to reduce its subsidiary's operational costs. But, curiously, the company is not leveraging production facilities, its own or that of its subsidiary, to cross manufacture brands and reduce distribution costs.

Says executive vice president Ravi Grover, "At present, we are upgrading the subsidiary's production technology. Soon, we will offer our flashlight / torchlight technology to Powercell." He does not rule out the possibility of using the Powercell plant to make Eveready products. The parent company caters to the southern market mainly out of its Chennai and Hyderabad plants, which have a combined capacity of 64 crore units per annum.